Aviation

[ Barrels of Oil Equivalent Saved: ]

45M

[ Jobs Impact:]

Low

Medium

High

[ Budget Impact:]

Low

Medium

High

[ Conventional Pollutants Reduced: ]

NOx

6,547 tons

[ Megatons of GHG Reduced: ]

19

Overview

If any industry had a stake in reducing its use of petroleum, it would be the airline industry. At 35% of total costs, jet fuel is often an airline’s biggest expense.1 Despite consuming 14% less fuel in 2011 than in 2000, U.S. carriers’ total fuel expenditures grew by 209%. In other words, they spent three times as much to purchase less fuel.2 The global airline industry is also coming under fire for its greenhouse gas emissions. To address rising fuel costs and pollution, the industry must become more efficient and expand its use of cleaner alternatives to petroleum.

Analysis

Burning large quantities of fuel to propel aircraft is incredibly expensive for airlines and, subsequently, their customers. To minimize these costs, the industry has improved its fuel efficiency by an average of 1-2% each year since the 1950s.3 But these improvements are being outpaced by the rapid growth of both passenger and freight transportation.4 The U.S. is already responsible for 40% of global GHG emissions from aviation,5 and its emissions are expected to jump another 9.7% by 2025.6 Roughly 80% of aviation emissions globally are from flights over 930 miles,7 and the average flight on a U.S. carrier is 1,121 miles.8 In most cases, shifting to more efficient ground or sea transport for such long trips is simply impractical.

America is the undisputed global leader in aviation, giving the country tremendous influence over the industry’s evolution, as well as an opportunity to profit from it. Roughly 75% of the commercial aircraft flying today were manufactured by Boeing.9 And American-owned Pratt & Whitney and GE are two of the largest jet engine manufacturers in the world,10 while GE is also the global leader in engine maintenance operations.11 The aviation sector supports 10 million jobs in the U.S. and has been our top export sector for the past 10 years.12 This influence and market share could be used to spur demand for cleaner technologies—which can and should be manufactured right here at home.

Implementation

Policy efforts to lower energy use and emissions should be aimed at helping industry improve the efficiency of air transportation and developing low-carbon alternative fuels.

Develop Biofuels for Aviation

Airlines can lower their overall GHG emissions by using advanced biofuels. However, the specific fuels required by jet engines will not be economical or plentiful enough without additional investment in production. The federal government could spur this investment by making these “drop-in” jet fuels a specific requirement of the Renewable Fuel Standard (RFS)—though any effort to adjust this portion of the RFS could leave the entire policy open to attack by opponents that would like to see it dismantled completely.13

Develop an Alternative to Europe’s Tax on Airlines

Starting in 2012 all flights that landed in the European Union (EU) were required to participate in the EU’s cap and trade program for carbon emissions.14 Due to opposition from several non-EU nations, the EU has agreed to postpone the carbon scheme for one year to allow for an international alternative to be developed. Since the EU is intent on reinstating this program if an agreement is not reached,15 Congress should pressure the International Civil Aviation Organization to finalize its global alternative, as requested by the aviation community.16 Otherwise, Congress should prepare for the creation of a domestic aviation emissions trading program.17 This would exempt U.S. carriers from having to pay into the EU program,18 and would allow Congress to direct revenues from the program back to American carriers, perhaps in the form of federal investment in innovation for aircraft efficiency or alternative fuels technologies.19

Continue the Modernization of America’s Air Traffic Control System

The Federal Aviation Administration is partnering with industry to modernize the U.S. air traffic control system. The new system, referred to as “NextGen”, will cut delays by 35-40%,20 while reducing fuel use, saving carriers money, and avoiding GHG emissions.21 However, significant budget cuts could delay NextGen’s implementation by up to 10 years, costing the government over $200 million in lost economic benefits.22 Congress must ensure that NextGen receives the funding required for completion, and provide increased oversight to limit budget overruns and delays.23 A low-interest federal loan program should be offered to help airlines equip planes with the systems required to utilize NextGen.24

United States, Government Accountability Office, “Management Challenges Associated with Program Costs and Schedules Could Hinder NextGen Implementation,” Report, February 16, 2012. Accessed April 14, 2013. Available at: http://www.gao.gov/products/GAO-12-223.

FAA estimates that it will cost $5-7 billion to upgrade all planes with necessary equipment. See United States, Government Accountability Office, “Transportation: Key Issues and Management Challenges,” Report, March 29, 2012, p.15. Accessed April 14, 2013. Available at: http://www.gao.gov/products/GAO-12-581T.

Implementation

How to Use the PowerBook

The PowerBook is a menu of á la carte options, not a blueprint that requires every element to hold it together. It is designed to provide federal policymakers and regulators with a selection of policy ideas to help solve specific challenges in how our nation produces, transports, and consumes energy.

SECTORS

The PowerBook is divided into five economic sectors: power, transmission, buildings and efficiency, industry, and transportation. Each sector includes multiple components, which are specific elements of that sector that require some policy change. Components that impact multiple sectors, such as clean energy finance or regulatory reform, are included in a sixth cross-sector section.

COMPONENTS

Each component has three parts: a short overview, an analysis of the challenges and opportunities for energy, employment, and the environment, and an implementation section that outlines specific actions that Congress, the administration, or the independent regulatory agencies can take. The policy recommendations in the implementation section are intended to serve as frameworks for more detailed legislation or regulatory reform proposals.

The components in the PowerBook reflect the input from a broad group of business leaders, policymakers, analysts, and academics. We will update them regularly to add new policy ideas, revise existing proposals, and reflect progress made in Congress or through the regulatory process. We invite readers to provide us suggestions to build upon the proposals in our components or new policies we should consider adding. Please send us your comments via the contact page.

OUR ANALYSIS

The PowerBook provides both pragmatic ideas to move America toward cleaner energy and data showing the potential impacts that these policies could have on our energy systems and economy. By combining several datasets, from economy-wide to industry-specific, we have developed a basic methodology for each component to estimate the effects these policies would have on CO2, conventional pollutants, and domestic energy needs. While future, independent modeling will provide higher accuracy, the current metrics offer a general barometer of impact and a way to compare the effects of various components.